The NRL has missed its opportunity to secure the services of former Queensland and Australia representative Israel Folau, with the code-switcher reported to be heading to European rugby.

Folau pulled the pin on his four-year, big-money deal with AFL expansion franchise Greater Western Sydney on November 1 after just two seasons, citing an absence of passion for Australian rules.

Last season's NRL wooden spooner Parramatta, under the guidance of former New South Wales State of Origin coach Ricky Stuart, was hot favourite to lure the 23-year-old back to rugby league.

News Limited reports on Monday indicated that the club had made a request to the NRL to deliberately break the salary cap in order to squeeze Folau onto their books for the next two seasons.

The NRL said on Friday that it had been working with the club to ensure Folau could fit under the Eels' salary cap for 2013 and "both believed that significant progress could be made".

But the league confirmed Folau had not accepted a formal, unconditional offer from Parramatta and the athletic back, who earned seven caps for Australia, will not play rugby league next season.

Reports said the former Storm, Broncos, Maroons and Kangaroos star has accepted a lucrative deal to play rugby union in Europe.

"This has come as something of a surprise to us today," Eels chief executive Ken Edwards said in a statement.

"Our offer to Israel was unconditional.

"We have worked closely with the NRL and have always been confident that salary cap issues would be resolved."

After announcing his departure from the AFL Folau did not initially confirm a return to the code he made his name in, but Eels officials said they had initiated talks with the young star's management.

Stuart had said the club would "move heaven and Earth" to get Folau's signature.

In the end a bigger pay day lured Folau away from rugby league for the second time in his fledgling career, with a more lucrative offer on the table from French rugby.

"It is disappointing that Izzie at this stage has chosen to pursue another path but we've also been clear that we are about having players who are focussed on what we are trying to achieve as a club," Edwards said.

"It is why we had previously ruled out short term appearances with other codes. We are comfortable with our current playing roster ahead of the 2013 season."

NRL interim chief executive Shane Mattiske had met with Folau's representatives even before he announced his departure from the AFL and said he had been discussing salary cap issues with the Eels since then.

"We worked in good faith with the club to ensure that Israel's contract could be met within the cap and it is unfortunate that he has elected to pursue another path," Mattiske said.

"It would have been nice to see Israel back in the NRL because it is the game he is most suited to and the one that I think would have given him the biggest challenge in facing the best athletes in the most exciting contests week in and week out.

"Ultimately though it is his choice and we have to respect that. I think Parramatta has done everything possible and we have certainly worked closely with them in that process."

Folau's NRL career began in Melbourne in 2007, where he played 59 matches for the Storm before moving to Brisbane in 2009, scoring 36 tries in 37 appearances with the Broncos.

He made five State of Origin starts for Queensland and played in the inaugural NRL All Stars game in 2010.

Folau made his AFL debut for Greater Western Sydney in round one of 2012 and kicked his first of two career goals in round four against Adelaide.